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Fewer people placed financial bets over the summer as they were distracted by the World Cup and the hot weather, City tycoon Peter Cruddas has said, as profits at his online trading company plunged.

Former Conservative party treasurer Mr Cruddas, dubbed the City of London’s richest man, said his business CMC Markets has been knocked by regulatory changes, subdued markets and a slowdown in client activity. Pre-tax profits dived 76pc for the half-year.

Major reforms were introduced in August aimed at protecting novice traders hoping to get rich quick from risky so-called contracts for difference (CfD) trading. The new rules include higher barriers to entry and limits on how much clients can lose...